The Florida Supreme Court resolved a conflict between the District Courts in applying the Concurrent Causation Doctrine where there were multiple causes creating the loss. Sebo v. Am. Home Assur. Co., 2016 Fla. LEXIS 2596 (Fla. Dec. 1, 2016).
After purchasing his home, John Sebo procured an "all risks" homeowners policy provided by American Home Assurance Company (AHAC). Shortly after Sebo purchased the property, water began to intrude the home during rainstorms. Major water leaks occurred. It became clear that the home suffered from major design and construction defects. In October 2005, Hurricane Wilma further damaged the home.
AHAC denied coverage for most of the claimed losses. It provided $50,000 for mold. The residence could not be repaired and was eventually demolished.
In January 2007, Sebo sued a number of defendants, including the sellers of the property, the architect who designed the residence, and the construction company that built the home. He alleged the home had been negligently designed and constructed, and that the sellers had fraudulently failed to disclose the defects in the property. Sebo amended his complaint, adding AHAC as a defendant. After Sebo settled with a majority of the other defendants, the trial proceeded only on his declaratory action against AHAC. The jurors found in favor of Sebo, and the court eventually entered judgment against AHAC.
On appeal, the District Court found that there was more than one cause of loss, including defective construction, rain and wind. The court disagreed with the decision issued by another District , Wallach v. Rosenberg, 527 So. 2d 1386 (Fla. Ct. App. 1988). Wallach held that the concurrent causation doctrine should be applied in a case involving multiple perils and a first-party policy. Therefore, the District Court here reversed and remanded for a new trial in which the causation of Sebo's loss would be examined under the efficient proximate cause theory.
The Supreme Court noted that the efficient proximate cause provided that where there was a concurrence of different perils, the efficient cause – the one that set the other in motion – was the cause to which the loss was attributable. The concurrent cause doctrine, on the other hand, provided that coverage may exist where an insured risk constitutes a concurrent cause of the loss even when it is not the prime or efficient cause.
The Florida Court observed that the concurrent causation doctrine originated with the California Supreme Court's decision in State Farm Mut. Auto Ins. Co. v. Partridge, 514 P.2d 123 (Cal. 1973). Where neither of two perils could have created the loss alone but instead combined to create the loss, the Partridge court could not identify the prime, moving, or efficient cause in order to determine coverage, and pronounced the new doctrine.
The District Court in Wallach found the efficient proximate cause doctrine to be of little assistance in cases where both causes of the harm were independent of each other. Therefore, Wallach held that "where weather perils combine with human negligence to cause a loss, it seems logical and reasonable to find the loss covered by an all-risk policy even if one of the causes is excluded from coverage."
One exclusion in Sebo's policy barred coverage for faulty design, workmanship, construction of all or part of the property. It was not in dispute that the rainwater and hurricane winds combined with the defective construction to cause the damage to Sebo's property. As in Partridge, there was no reasonable way to distinguish the proximate cause of Sebo's property loss – the rain and construction defects acted in concert to create the destruction of Sebo's home. Therefore, it was not feasible to apply the efficient proximate cause doctrine because no efficient cause could be determined. Where weather perils combined with human negligence to cause a loss, it seemed logical and reasonable to find the loss covered by an all-risk policy even if one of the causes was excluded from coverage.
Therefore, the District Court's decision was quashed and the case remanded for further proceedings.